PV inverter after-sales service market to double by 2017

Despite PV inverter hardware profit margins being squeezed, the after-sales service market is forecast to more than double by 2017 to reach $1.7 billion, providing suppliers with a valuable additional profit source.

02/26/2013


IMS Research (acquired by IHS, Inc.)The market for photovoltaic (PV) inverter service plans and extended warranties is forecast to grow by 110% between 2012 and 2017, according to a recent report entitled PV Inverter Service Plans and Extended Warranties from IMS Research, now part of IHS Inc. Despite PV inverter hardware profit margins being squeezed, the after-sales service market is forecast to more than double by 2017 to reach $1.7 billion, providing suppliers with a valuable additional profit source. 

The analysis revealed that one of the key drivers of this growth will be demand for utility-scale installations which is forecast to be one of the fastest growing segments over the next five years. These systems will typically use large three-phase inverters which will often be purchased with an annual service plan to ensure optimal operation. In 2012, 26% of high power three-phase inverters were sold with a service plan attached, and this is forecast to increase to 34% by 2017. In many cases, banks and finance providers will specify that inverter service plans are required as a condition of the loan in order to ensure that PV installations operate efficiently and that inverter downtime is minimized.

IMS Research (acquired by IHS, Inc.)

Although the PV inverter after-sales service market will present revenue growth opportunities, a variety of challenges exist for suppliers, including coping with the PV market becoming more geographically fragmented.

“Along with local legislation stipulating varying minimum warranty lengths in different countries, suppliers will have to establish service offices in new emerging markets in order to provide customers with the adequate response times and minimum levels of after-sales service,” explained Cormac Gilligan, PV analyst at IHS. “Industrial inverter manufacturers that are not solely focused on PV may initially be best placed to offer after-sales service in new PV markets, as they often have existing operations established in these regions to serve other industries, whereas pure-play PV inverter manufacturer may have to use third party service partners until they can establish a local service center in these new emerging markets.”

In order for inverter suppliers to promote their after-sales service and distinguish themselves from the competition, they are developing different approaches and strategies for marketing and providing service plans and extended warranties. As inverter suppliers are under increasing pressure to decrease their inverter hardware prices and as new competing technologies such as microinverters with longer standard warranty lengths are shipped in greater numbers, some inverter suppliers are offering longer standard warranties at no extra charge and some central inverter manufacturers are offering to provide full PV plant operations and maintenance.



Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
June 2018
2018 Lubrication Guide, Motor and maintenance management, Control system migration
May 2018
Electrical standards, robots and Lean manufacturing, and how an aluminum packaging plant is helping community growth.
April 2018
2017 Product of the Year winners, retrofitting a press, IMTS and Hannover Messe preview, natural refrigerants, testing steam traps
June 2018
Machine learning, produced water benefits, programming cavity pumps
April 2018
ROVs, rigs, and the real time; wellsite valve manifolds; AI on a chip; analytics use for pipelines
February 2018
Focus on power systems, process safety, electrical and power systems, edge computing in the oil & gas industry
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
April 2018
Implementing a DCS, stepper motors, intelligent motion control, remote monitoring of irrigation systems
February 2018
Setting internal automation standards

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
Maintenance & Safety
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me